Tort Reform in Reverse?

Singin ’ The PL Blues

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MODERATOR: Sean Fitzpatrick, Esq.,

Senior Vice President, Middle Market & Specialty Financial, The Hartford • • • •

PANELISTS: Timothy Braun, MBA, Louis H. Castoria, Esq.,

Edelman & Dicker LLP Executive Vice President, AXIS Partner, Wilson Elser Moskowitz

Jason Hawkins,

Managing Director, Aon

Kalju Nekvasil, Esq.,

Partner, Goodman & Nekvasil, P.A.

Agenda

• Tort Reform in Reverse: Has the tide turned?

• Developments in Securities Liability • Healthcare Reform – Implications for the Professional Liability Industry • Financial Services and Professional E&O – How will Underwriters and Brokers address a changing liability environment?

Developments in Securities Liability

Scandals, Prosecutions, and Investigations • • • Madoff Stanford And a Cast of Thousands

Regulation of Hedge Funds? Insurance?

Changes in the FINRA Arbitration System • Fewer “Industry” Panelists • Fewer Motions to Dismiss • No Arbitrations of Statutory Rights

Section 1031 Exchanges • $3.7 Billion in TIC offerings in 2006 • What happened at DBSI?

• Why real estate turned out to be risky

Reg. D – Private Offerings • 26,485 private offerings filed in 2008 • What happened at Medical Central?

• What happened at Provident Royalties • Who is minding this store?

Looking Ahead -- Trends

Healthcare Reform – Implications for the Professional Liability Industry

Health Care Reform = Tort Reform?

Managed Care, ERISA, and Bad Faith

Medical Device Safety Act

Arbitration Fairness Act

Financial Services and Professional E&O – How will Underwriters and Brokers address a changing liability environment?

Effect on FI Underwriting

Sector Analysis • Underwrite to individual sectors to determine which are more vulnerable with systemic exposure always a concern.

• Understand that the exposure is fluid and changes occur from both internal and external forces.

Effect on FI Underwriting

• Management Analysis • Financial Analysis • Operational Risk Management Analysis • Enterprise Risk Management

Effect on FI Underwriting

Conclusion: Comprehensive Review • Utilization of traditional and non-traditional underwriting resources • Differentiating between well-managed and poorly-managed risks • Balance between proper rate and coverage vs. premium

Industry Challenges

• A Brokers Perspective  Challenges faced by the broker  What it means for the client  Education - broker and client focused • Potential Impact on Clients  Higher premiums and retentions  Limited coverage available  Managing insurance budgets vs. insurance spend  Education

Industry Challenges

• Carrier / Industry Challenges  If current trend continues can/will carriers continue to write certain lines of business  Increased defense costs  Increased claim frequency and severity   Program limits and structures “In the News”/Headline Risks – Madoff, Stanford, Lehman, AIG etc….

 Economy

Questions & Answers

Many thanks to …

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Sean Fitzpatrick

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Tim Braun

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Louis Castoria

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Jason Hawkins

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Kalju Nekvasil